Daily Market Lookup

Asian shares fell on Tuesday as relief over a pause in escalation of the trade war between the U.S. and China gave way to doubt over the two countries' ability to resolve differences Adding to market worries, an inversion at the short end of the U.S. yield curve raised the specter of a possible U.S. recession. The temporary freeze on further hostilities in the trade war between the United States and China had sparked a global rally in equity markets on Monday, pushing MSCI's all-country world index up 1.3 percent. But even before the trading day ended, major U.S. indexes pulled back from intraday highs on scepticism that Washington and Beijing can resolve their deep-seated differences in the three-month negotiating window that was agreed, after which tariffs could escalate again. Already, there was confusion over when the 90-day period would start. A White House official said it started on Dec. 1, while earlier, White House economic adviser Larry Kudlow told reporters it would start on Jan. 1. Moreover, none of the commitments that U.S. officials said had been given by China, including reducing its 40 percent tariffs on autos, were agreed to in writing and specifics had yet to be hammered out. Adding to worries over the outlook for the global economy, the yield curve between U.S. three-year and five-year notes, and between two-year and five-year paper inverted on Monday - the first parts of the Treasury yield curve to invert since the financial crisis, excluding very short-dated debt. However, he added that solid U.S. manufacturing data released Monday pointed to a stronger economic outlook, with new orders a "key driver" in boosting activity. Federal Reserve Chairman Jerome Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee, but the hearing was postponed because of a national day of mourning for U.S. President George H.W. Bush, who died on Friday. The dollar came under pressure last week on Powell's comments that rates were nearing neutral levels, which markets widely interpreted as signaling a slowdown in the Fed's rate-hike cycle.

The Aussie dollar declined on Wednesday in Asia after data showed the country’s economy expanded less than expected in the three months through September. Gross domestic product rose 0.3% from the second quarter, the statistics bureau said on Wednesday. Analysts previously expected GDP to rise 0.6%. On Tuesday, The Reserve Bank of Australia kept interest rates at a record-low 1.5% as expected. The U.S.-China trade war remained in focus after China’s Ministry of Commerce released its first official statement following a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping over the weekend. Beijing said the trade meeting with the U.S. was “very successful” but did not provide any further details on the outcome of the meeting. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars. Gold prices slipped on Wednesday in Asia as the dollar rebounded following a plunge on the Wall Street overnight. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars. The dollar lost its upward momentum on dovish signals from the Fed, which indicated that rate hikes from 2019 would have to be re-evaluated on economic and inflation data vs previous assertions of a more hawkish policy. Gold prices remained near-five-month highs as the greenback struggled in recent weeks, as traders suspect the Federal Reserve will pause its rate hike plan after a fourth Federal Reserve rate increase this month.

Oil prices fell on Wednesday, pulled down by swelling U.S. inventories and a plunge in global stock markets as China's government warned of increasing economic headwinds. Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said U.S. crude inventories rose by 5.4 million barrels in the week to Nov. 30, to 448 million barrels, in a sign that U.S. oil markets are in a growing glut. Official U.S. government oil production and inventory data is due later on Wednesday. More broadly, the slide in U.S. oil followed a tumble in global stock markets on Tuesday, with investors worried about the threat of a widespread economic slowdown. Key to the global economic outlook will be whether the United States and China can resolve their trade disputes. Washington and Beijing announced a 90-day truce last weekend, during which neither side will further increase punitive import tariffs. In a sign of easing tensions between the two world's biggest economies, Chinese oil trader Unipec plans to resume U.S. crude shipments to China by March after the Xi-Trump deal at the G20 meeting reduced the risk of tariffs being imposed on these imports, people with knowledge of the matter said. Yet the truce may not last. U.S. President Donald Trump threatened on Tuesday to place "major tariffs" on Chinese goods imported into the United States if his administration didn't reach a desirable deal with Beijing. China's state council on Wednesday issued guidance to support employment as the economy slows, saying the country should pay "high attention" to the impact on employment from increasing economic headwinds Bank of America Merrill Lynch (NYSE:BAC) said in its 2019 economic outlook, published on Tuesday, that "most major economies are likely to see decelerating activity", although it added that "a steady stream of monetary and fiscal stimulus measures" was expected to stem the slowdown.

Intraday RESISTANCE LEVELS

5th December 2018

R1

R2

R3

GOLD-XAU

1,238-1,244

1,260

1,266

Silver-XAG

14.80

15.10

15.50-16.40

Crude Oil

52.80-53.30

54.05

54.90-55.40

EURO/USD

1.1430

1.1500-1.1560

1.1600

GBP/USD

1.2810

1.2855-1.2900

1.2950

USD/JPY

114.00

114.70-115.50

116.00

Intraday SUPPORTS LEVELS

5th December 2018

S1

S2

S3

GOLD-XAU

1,230

1,221-1,214

1,207

Silver-XAG

14.30-14.00

13.61

13.00-12.40

Crude Oil

52.00

51.20-50.10

49.50

EURO/USD

1.1350-1.1300

1.1205-1.1160

1.1205-1.1160

GBP/USD

1.2760

1.2700

1.2660-1.2600

USD/JPY

113.00

112.10

111.50-111.00

Intra-Day Strategy (5th December 2018)

GOLD-XAU

Sell on Strength

Silver-XAG

Neutral

Crude Oil

Neutral

EUR/USD

Neutral to Buy

GBP/USD

Neutral to Buy

USD/JPY

Neutral to Sell

Gold – XAU

Gold on Tuesday made its intraday high of US$1238.29/oz and low of US$1230.44/oz. Gold up by 0.535% at US$1237.23/oz.

Technicals in Focus:

In daily charts, prices are below 100DMA (1228) and breakage above will call for 1240-1260. MACD is below zero line and histograms are decreasing trend and it will bring upward stance in the upcoming sessions. RSI is in oversold region and more downside is expected before it gets stretched. Stochastic Oscillator is in overbought territory and giving positive crossover to confirm bullish stance for intraday trade.

Silver - XAG

Silver on Tuesday made its intraday high of US$14.49/oz and low of US$14.37/oz. Silver settled up by 0.625% at US$14.48/oz.

Technicals in Focus:

On daily charts, silver is sustaining below 100DMA (15.45), breakage above will lead to16.05-16.30. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in oversold region and giving negative crossover to show downside move for the intraday trade.

Oil - WTI

Crude Oil on Tuesday made an intra‐day high of US$54.66/bbl, intraday low of US$52.58/bbl and settled down by 1.00% to close at US$52.66/bbl.

Technicals in Focus:

On daily charts, oil is sustaining below its 50DMA i.e. 66.10 which is a resistance level and breakage above will call for 66.80-67.08. MACD is above zero line and histograms are in increasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in overbought region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 52.80-55.40 with stop loss at 55.40; targeting 52.00-51.20 and 50.20. Buy above 52.00-49.50 with risk daily closing below 49.50 and targeting 52.80-53.30-54.05 and 54.90-55.40.

Intraday Support Levels

S1

52.00

S2

51.20-50.10

S3

49.50

Intraday Resistance Levels

R1

52.80-53.30

R2

54.05

R3

54.90-55.40

TECHNICAL INDICATORS

Name

Value

Action

14DRSI

36.178

Sell

20-DMA

54.45

Buy

50-DMA

63.43

Buy

100-DMA

65.88

Buy

200-DMA

66.45

Buy

STOCH(5,3)

66.326

Buy

MACD(12,26,9)

-3.253

Buy

EUR/USD

EUR/USD on Tuesday made an intraday low of US$1.1317/EUR, high of US$1.1417/EUR and settled the day down by 0.096% to close at US$1.1341/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 100DMA (1.1621), which become immediate resistance level, break below will target 1.1690-1.1730. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in overbought territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently approaching oversold region and giving wards directions to consider sell.

GBP/USD

GBP/USD on Tuesday made an intra‐day low of US$1.2657/GBP, high of US$1.2838/GBP and settled the day down by 0.0628% to close at US$1.2714/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 100DMA (1.3096) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Buy

Based on the charts and explanations above; sell below 1.2810-1.3000 with targets at 1.2800-1.2710 and 1.2660-1.2600. Buy above 1.2760-1.2600 with targets 1.2855-1.2900 and 1.3000-1.3050 with stop loss closing below 1.2600.

Intraday Support Levels

S1

1.2760

S2

1.2700

S3

1.2660-1.2600

Intraday Resistance Levels

R1

1.2810

R2

1.2855-1.2900

R3

1.2950

TECHNICAL INDICATORS

Name

Value

Action

14DRSI

44.137

Buy

20-DMA

1.2894

Buy

50-DMA

1.2973

Buy

100-DMA

1.2979

Buy

200-DMA

1.3318

Buy

STOCH(5,3)

31.086

Sell

MACD(12,26,9)

-0.0005

Sell

USD/JPY

USD/JPY on Friday made intra‐day low of JPY113.36/USD and made an intraday high of JPY113.81/USD and settled the day down by 0.783% at JPY113.64/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 50DMA (111.82), which is major support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is approaching overbought territory and signaling to buy as it has given positive crossover to confirm bullish stance.